Sekisui House, Ltd. April 4, 2012

Transcription

1 (Ticker Code:1928) Sekisui House, Ltd. April 4, , Oyodonaka 1-chome, Kita-ku, Osaka Chairman & Representative Director (CEO) Isami Wada NOTICE OF THE 61 ST ORDINARY GENERAL MEETING OF SHAREHOLDERS We express our deep appreciation to each of the shareholders for their extraordinary support. Now, since the 61 st Ordinary General Meeting of Shareholders of Sekisui House, Ltd. (the Company or Sekisui House ) is to be held as stated below, we would like to ask you to attend the meeting. If you are unable to attend the meeting, it is still possible to exercise your voting rights either in writing or via the Internet. To exercise voting rights in writing, please study the reference documents below and indicate on the enclosed voting form whether you approve or disapprove the proposals listed, and return it to the Company by 6:00 p.m. of Wednesday, April 25, To exercise voting rights via the Internet, please refer to next page, Guidelines regarding the exercise of a voting right via the Internet. 1. Date and Time: 10:00 a.m., Thursday, April 26, Place of the Meeting: Umeda Stella Hall 3F, Tower West, Umeda Sky Building 1-30, Oyodonaka 1-chome, Kita-ku, Osaka 3. Agenda: Items for reporting: 1.Reports on the Business Report, and the Consolidated Financial Statements and the Non-Consolidated Financial Statements for the 61st fiscal year (February 1, January 31, 2012) 2.Report on the Results of Audit conducted by the Accounting Auditor and the Board of Corporate Auditors with respect to the Consolidated Financial Statements for the 61st fiscal year ended January 31, 2012 Propositions to be tabled: No.1 Appropriation of retained earnings for the 61st fiscal year ended January 31, 2012 No.2 Election of 11 Directors No.3 Election of 3 Corporate Auditors No.4 Provision of Bonus to Directors as a group 4. Guideline of the Exercise of Voting Rights: Please refer to next page, Guideline of the Exercise of Voting Rights. If attending the meeting in person, please submit the enclosed Voting Right Exercise Form to the receptionist at the meeting [Translation: Please note that this document purports to be a translation from the Japanese original Notice of Convocation of the Ordinary General Meeting of Shareholders 2012 of Sekisui House, Ltd. prepared for the convenience of foreign readers. However, in the case of any discrepancy between the translation and the Japanese original, the latter shall prevail. Please also be advised that certain statements regarding voting procedures for domestic shareholders are not applicable to the shareholders outside Japan.] 1

2 Guideline of the Exercise of Voting Rights 1. Internet disclosure Following matters are made available on the Company s website ( company/holders/shotsu.html) pursuant to the relevant laws and regulations, and Article 16 of the Articles of Incorporation of the Company. 1) System which ensures the due execution of business in the Business Report 2) List of Notes to Consolidated Financial Statements in the Consolidated Financial Statements 3) List of Notes to Non-Consolidated Financial Statements in the Non-Consolidated Financial Statements 2. Announcement method if the statements of the Reference Documents for General Meeting of Shareholders and other documents are amended: In case that any amendment to the statements of the Reference Document for General Meeting of Shareholders, business report and consolidated financial statements, or non-consolidated financial statements is necessary, please be advised that the Company will post such amendments where applicable on the Company's website ( html). 3. Handling of votes if a voting right is exercised using both mail and the Internet: In case that a voting right is exercised using both mail and the Internet, then only the vote registered via the Internet will be recognized as valid. 4. Handling of votes if a voting right is exercised more than once via the Internet: In case that a voting right is exercised more than once via the Internet, only the last vote will be recognized as valid. 5. Guidelines regarding the exercise of a voting right via the Internet: When exercising a voting right via the Internet, the Company cordially requests shareholders to carefully read the matters stated below before any exercise of their voting rights. While the exercise of a voting right via the Internet is received by 6:00 p.m. on 25 th April, 2012 (Wednesday), it is best to exercise your voting rights as soon as possible. If you have any inquiries, please contact the help desk below. (1) Website for exercising votes: 1 Exercising a voting right can only be made by accessing our designated website for the exercise of voting rights ( from your personal computers or mobile phones (i-mode, EZweb, Yahoo! Keitai). However, it is not possible to gain access to the designated website from 2:00 AM to 5:00 AM. * The i-mode, EZweb and Yahoo! are trademarks or registered trademarks of NTT DoCoMo, Inc., KDDI Corporation and Yahoo! Inc. of the U.S., respectively. 2 Depending on the Internet connection of your computer (i.e., if a shareholder sets up a firewall, installs any security software or uses a proxy server), the service may not be available. 3 When exercising a voting right through mobile phones, please use either of the services provided by i-mode, EZweb or Yahoo! Keitai. In addition, please note that if the handset of your mobile phone is incompatible with the SSL (Secure Socket Layer) transmission or other transmission service through mobile phones, the service may not be available for security reasons. (2) Internet voting procedure: 1 On the website for the exercise of voting rights ( please use the log-in ID and temporary password which are shown on the vote exercise form. After logging in, please indicate whether you approve or disapprove the items on the agenda by following the instructions on the display screen. 2

3 2 To prevent unauthorized access to the website by persons other than the shareholder (spoofing) or alteration of votes submitted, the Company requests the users change the temporary password given to the shareholder to another password on the website for the exercise of voting rights. 3 The Company will inform you of the new log-in ID and temporary password at every convocation of general meetings of shareholders. (3) Connection charges when accessing the exercise of voting rights website: Any connection charges to be incurred when accessing the website for the exercise of voting rights (all internet connection charges and call charges) must be borne by the exercising shareholder. Similarly, if the shareholder uses a mobile phone to vote, the exercising shareholder must bear the costs incurred by paying by packet pack communications and other call charges. (4) Method to receive the notice of convocation: If a shareholder wishes to receive a notice of convocation by , please follow the procedures listed on the website for the exercise of voting rights. After following such procedures, the Company will send the notice of convocation by for the next meeting of shareholders. (Please note that this procedure cannot be taken from mobile phones and the address of your mobile phone cannot also be designated as the recipient.) Mitsubishi UFJ Trust and Banking Corporation Corporate Agency Service Support: dial-in 0120 (173) 027 * Business Hours: from 9:00am to 9:00 pm (call free) 6. Electronic Voting Platform If you are a nominee shareholder such a trust bank (including a standing proxy) and apply in advance to use the electronic voting platform operated by ICJ, Inc. established by the Tokyo Stock Exchange and others, you are entitled to use the platform for uses other than the aforementioned exercise of your voting rights electronically via the Internet as a method for exercising your voting rights. Note:* The service is available in Japanese only. 3

4 Attached Documents The Business Report for the 61st fiscal year (Feb.1, 2011 Jan.31, 2012) 1. Business Conditions 1) Progress and Results of Sekisui House Group Japan s economy showed signs of steady progress towards recovery from the devastating impact of the Great East Japan Earthquake. The period under review saw a normalization of manufacturing activities, etc., with supply-side constraints largely resolved thanks to the early resumption of corporate activities, and growth in orders supported by demand for reconstruction in areas affected by the disaster. However, the financial instability caused mainly by the European debt crisis led to a high level of risk aversion in capital markets. Meanwhile, the persistently strong yen and the suspension of production at Japan s production bases in Thailand due to the adverse impact of recent flooding all took a toll on business activities, putting significant downward pressure on corporate earnings. In this environment, uncertainty over the economic outlook heightened. In the housing market, additional stimulus measures for the support of housing acquisition were devised by the government to promoting environmentally friendly housing. These measures included the resumption of subsidies for the installment of ENE FARM, a household fuel cell system, Flat 35S, a preferential interest rate system, and the eco-point system for housing, all of which had originally ended. However, concerns over the economic outlook suppressed housing investment somewhat, and the number of new housing starts for 2011 was around 830,000, increasingly only modestly from the previous year. Meanwhile, consumer awareness of safety, reliability, and comfort in housing, as well as of the importance of energy at the time of disaster, increased after the earthquake. In this environment, Sekisui House actively promoted the sale of homes featuring SHEQAS, Sekisui s antiseismic system that can halve the transfiguration of a building, as well as Green First homes with a photovoltaic power generation system or household fuel cell system installed, as part of Sekisui s efforts to provide disaster-resistant, eco-friendly houses. The Company also developed and commenced sales of Green First Hybrid, a new series of homes featuring a power supply system combining solar cells, fuel cells, and storage batteries, the first of its kind in the world. Sekisui House participated in the Tokyo Motor Show held in December 2011, as the first housing manufacturer to join the event. The Company showcased Green First Hybrid as a futuristic housing model proposing a new connection between EVs and Smart Houses, and communicated the sophistication of its environmental technology for housing to a wide audience. 4

5 In the Urban Redevelopment Business, Sekisui House began construction of a project in Nakagyo-ku, Kyoto City, where Ritz-Carlton, the most luxurious brand of the Marriot Hotel Group, the world s leading hotel chain, will be open in the spring of In overseas business, Sekisui House, as a core company of the Modern Construction Industrial Park, a national project carried out by Shenyang City, China, started to construct a production factory for steel-framed housing to meet demand for energy-saving and high functional industrialized housing in China. In Australia, Sekisui House commenced the joint development project of Central Park, a residential and commercial complex in central Sydney, with Frasers Centrepoint Limited. Below are the results of each business segment. Custom Detached Houses Business In the Custom Detached Houses Business, Sekisui House took initiatives to bolster orders in line with the Green First Strategy. In product development, specifically steel-framed housing, Sekisui House started to sell Airkis, a system that focused on health as an essential factor for leading a comfortable life, by introducing the product to its mainstay steel-framed housing products as a standard feature. Airkis is an air environment-friendly system that can halve the level of five chemical substances, including formaldehyde, in the internal living space from that of national standards. It was created following the development and study of building materials to improve the internal air environment of houses since the 1990s as the sick house syndrome emerged as an issue. In October 2011, Sekisui House began selling a new flagship model called IS ROY+E, which uses a concrete wall called Dyne Concrete for the first time in a new structure that permits a higher degree of freedom in design. The Slow Living housing design, in which Sekisui House proposes a large and comfortable open space that softly connects the outer and interior areas, meanwhile won the 2011 Good Design Award in Japan. In the wood-framed Sha-Wood line that uses Bellburn, a well-regarded original exterior wall made of earthenware, the Company sought to expand sales by launching a Western-style model called Gravis Villa that uses new colors for the exterior walls and quality designs. Meanwhile, in response to an increase in orders for Bellburn, Sekisui House concluded the transfer of the building material business of Kurosaki Harima Corporation, which supplied the walls in question. By bringing the production of Bellburn in house, it sought to improve its production capabilities and cut costs. To respond to demand for the reconstruction of houses after the Great East Japan Earthquake, the Company established a system for supplying the standardized housing packages of its steel-framed housing, wood-framed housing, and Sekiwa no Ki no Ie for customers in afflicted areas who were hoping for the early reconstruction of their houses. 5

6 Thanks to the above initiatives, as well as renewed recognition of the safety of housing, demand for reconstruction in accordance with the rehabilitation of the disaster-hit areas, and the continuation of official stimulus measures, orders in this business fared steadily. Rental Housing Business In the Rental Housing Business, Sekisui House actively proposed Sha-Maison Gardens, which was designed with the concept of harmonizing with the landscape, minimizing the burden on the environment, and ensuring safety and comfort. Looking at product development, in February 2011, Sekisui House launched PRO+NUBE, a new product that adopted the new reinforced structural skeleton, and, as a standard feature, SHAIDD55, its original floor-sound insulation system that is able to significantly dampen the sound of impacts on the floor above. As part of its sales promotion activities, Sekisui House held the Sha-Maison Festa, a sales promotion event, in early March 2011 to organize site tours and propose an efficient land use. This event contributed greatly to the order growth. In the meantime, Sekisui House launched a business operations system called Sha-Maison with System, which provides Group-wide support to rental home owners to ensure long-term, stable operation of rental homes. By promoting the efficient use of land, among other measures, and establishing solid support systems, Sekisui House sought to strengthen its sales capabilities. Moreover, to respond to support reconstruction efforts in the disaster-hit areas, Sekisui House established a system for supplying the standardized housing packages to respond to demand for construction in the affected areas in the same manner as done in the Custom Detached Houses Business. In addition to these business development efforts, the Company intensely implemented area strategies in cities where demand for rental housing was rising, while, at the same time, meeting the need for inheritance tax saving measures, and orders in this segment remained steady. Houses for Sales Business In the Houses for Sale Business, by holding sales promotion events such as Sumai no Sankan-bi (visits to model houses) and Machinami Sankan-bi (visits to existing subdivisions with superb living environments), Sekisui House effectively executed the Green First Strategy, and strengthened its sales capabilities. In Miyagi Prefecture, the Company started development and marketing of a town project, SMART COMMON CITY AKASHIDAI, providing infrastructure for an enriched lifestyle in Sendai area, with disaster-resistant and crime-proof housing, and also contributing to reconstruction efforts after the Great East Japan Earthquake. In Kazusa no Mori,Chiharadai, the town project of detached houses for sale in Ichihara City, Chiba Prefecture, a draft of the landscape plan based on proposals that were jointly 6

7 prepared by Sekisui House and other developers and the residents was developed as the landscape plan of Ichihara City. In this way, Sekisui House was engaged in developing a town with a sound landscape that will increase the value of its assets in the future. The MAST brand promoted by each Sekiwa Real Estate, Group companies, was added to the Sekisui House lineup to bolster its marketing strategy by introducing a wider range of products and adding appeal in its development initiatives. However, nationwide real estate market remained sluggish. In response, Sekisui House took steps to streamline assets by continuing to adjust inventories. Condominium Business In the Condominium Business, Sekisui House started to sell the properties in Grand Front Osaka Owner s Tower, a condominium under construction in Kita-ku, Osaka City, based on a joint development project called the Umekita Advanced Development District Project, and this progressed steadily. Orders for new condominiums that Sekisui House started to sell in urban areas, such as Grand Terminal Tower Motoyawata (Ichikawa City, Chiba Prefecture) and Grande Maison Ikeshita The Tower (Nagoya City, Aichi Prefecture), also remained steady. However, the sales situation showed some weakness as a result of promoting sales of existing properties and continued inventory reduction. Urban Redevelopment Business In the Urban Redevelopment Business, Sekisui House sold Daiba Garden City to Japan Excellent, Inc., a J-REIT in February Meanwhile, Sekisui House is steadily managing Hommachi Garden City, which commenced operations in The Company is working on leasing activities for Garden City Shinagawa Gotenyama and Hommachi Minami Garden City, as well. Meanwhile, occupancy rates of Sekisui House Group s rental properties such as its Prime Maison series rental apartments remained firm. The Company was continuously involved in the independent development and acquisition of high quality rental properties and made steady progress in the business. Remodeling Business In the Remodeling Business, based on its Green First Strategy, Sekisui House made remodeling proposals aimed at energy conservation, installing photovoltaic power generation systems and introducing heat insulation renovations. The Company also actively proposed the remodeling of detached and rental houses to offer its customers comfortable living environments in accordance with individual and diversified lifestyles by holding nationwide Remodeling Fairs and Kitchen Storage Seminars. Meanwhile, Sekisui House focused on the recovery and reconstruction effort of the owners of its products immediately after the March 11 earthquake, and promptly responded to requests for repairs and related work and met demand increase. 7

8 As a result of these business promotions, orders remained steady. Real Estate Management Fees Business In the Real Estate Management Fees Business, the number of units of Sha-Maison low-rise apartments for block leasing and management by Sekiwa Real Estate companies enjoyed a steady increase. As the rental housing market picked up, particularly in urban areas, the Sekisui House Group was united in active sales promotions to attract new tenants. Moreover, by continuing to propose remodeling to homeowners in accordance with the needs in the market, Sekisui House maintained high occupancy rates, especially in the Tokyo metropolitan area. Other Businesses In overseas business, delivery of all 215 units sold in the Phase I properties in condominiums in Wentworth Point in Australia was completed in October Orders for other units that are currently being marketed, and properties for sale in Central Park, which Sekisui House acquired in Australia in July 2011 are also moving forward steadily. Moreover, Sekisui House started operations in Singapore by undertaking three real estate development projects. It also undertook large-scale urban development projects in Shenyang City and Suzhou City in China. Moreover, Sekisui House began constructing a factory that will provide materials for industrialized housing in Shenyang City. In the United States, Sekisui House began sale in One Loudoun, an urban residential and commercial complex project, and acquired land development projects from California Public Employee Retirement System (CalPERS). In the exterior business, Sekisui House sought to bolster its ability to make proposals to customers and enhance operating efficiency by integrating Greentechno Sekiwa companies and Sekiwa Construction companies, Ltd. Looking at business performance, Sekisui House took steps to increase orders in line with the key initiative of its mid-term management plan, the Green First Strategy (as a driver of business growth in eco-friendly housing) in reply to rising concern of safety and need for securing energy. As a result, order for detached houses and rental housing, in particular, increased. The installation rate of SHEQAS, Sekisui s antiseismic system, rose, and sales of houses combining photovoltaic power generation systems and household fuel cells made a significant contribution to earnings. Meanwhile, sales were also favorably affected by a number of other factors, such as demand for reconstruction in the disaster-hit areas and a hike in demand for rental housing in cities, and results for period under review which corresponds to the second year of the medium-term management plan were solid. 8

9 Orders in FY2011 amounted to 1,577,501 million, up 3.2% from the previous fiscal year. Net sales in FY2011 amounted to 1,530,577 million, up 2.8% from the previous fiscal year. Operating income grew to 70,897 million (up 25.8%), ordinary income to 70,075 million (up 24.5%), while net income amounted to 28,962 million (down 4.8%) owing to the effects caused by the changes in income tax rate, etc. 2) Issues for Sekisui House Group The Company is committed to making its production and construction structures even stronger to respond to demand emerging from the reconstruction efforts following the Great East Japan Earthquake, and will firmly execute its business strategies to deal with the hike in consumption taxes expected in the future, a review of the scope of inheritance tax, and other government policies. Moreover, the Company will strive to generate stable income through consistent management as well as implementation of further cost reduction including reform in production division in accordance with the medium-term management plan, even when it faces factors that put severe pressure on corporate performance, including a strong yen and financial turbulence, associated with the European sovereign debt crisis. We sincerely ask for our shareholders further support, assistance and guidance. 3) Breakdown of Orders Received and Net Sales of Sekisui House Group Millions of yen Orders brought forward from the previous year Orders for the year to Jan Net sales for the year to Jan Orders carried forward to the following year Custom Detached Houses Business 224, , , ,628 Rental Housing Business 207, , , ,101 Houses for Sale Business 31, , ,123 28,656 Condominiums Business 6,878 60,717 39,681 27,914 Urban Redevelopment Business 13,200 24,520 37,720 - Remodeling Business 14, , ,180 15,927 Real Estate Management Fees Business - 378, ,247 - Other Businesses 54, ,560 81,267 90,482 Total 551,787 1,577,501 1,530, ,711 Note: Each business division is set out in 6) Major businesses. 9

10 4) Business Results and Financial Situation of Sekisui House Group Millions of yen Year to Jan. Year to Jan. Year to Jan Year to Jan Net sales 1,514,172 1,353,186 1,488,369 1,530,577 Net income 11,516 29,277 30,421 28,962 Net income per share ( ) Total assets 1,387,237 1,353,946 1,341,308 1,445,828 Net assets 754, , , ,374 5) Plant-and-equipment investment and conditions of financing The aggregate amount of plant-and-equipment investments made by the Sekisui House Group during the fiscal year under review amounted to 43,312 million yen and the main component were acquisition of the real estate for investments (including transfer from inventories) and, construction and improvement of production facilities. The Company procured funds during the fiscal year under review mainly through issuing 50,000 million yen Zero Coupon Convertible Bonds (bonds with stock acquisition rights). 10

11 6) Major Businesses The Company and the Sekisui House Group companies are involved in the contract design, construction, and letting of prefabricated houses. They also buy and sell, act as agents for, lease and manage real estate. The position of each company within the Group is illustrated below. Custom Detached Houses Business Rental Housing Business Houses for Sale Business Condominiums Business Urban Redevelopment Business Remodeling Business Real Estate Management Fees Business Other Businesses Designing, constructing, and contracting for sale detached houses Designing, constructing, and contracting for sale rental housing, medical and nursing care facilities, and other buildings Selling houses and real estate, and designing, constructing, and contracting for sale houses on residential land for sale Selling condominiums Developing office buildings, commercial facilities, and other facilities, and managing and maintaining its own properties Renovating housing Leasing, managing, maintaining, and brokering real estate Overseas business and exterior business, etc. 11

12 The outline of the major business of the Sekisui House Group is set out below: Customers Leasing, managing, maintaining, and broking real estate Desinging, constructing, and contracting for Selling houses and real estate sale detached houses Selling condominiums Designing, constructing, and contracting for Managing and maintaining its own properties sale rental housing, medical and nursing care facilities, Renovating rental housing and other buildings Selling houses and real estate Selling condominiums Developing office buildings, commercial facilities, and other facilities, and managing and maintaining its own properties Renovating housing Buying, selling, broking, leasing, managing real estate Broking of real estate Sekiwa Real Estate, Ltd. Landescape and exterior work Sekiwa Real Estate Kansai, Ltd. Sekiwa Real Estate Chubu, Ltd. Construction of Housing materials supplier Sekiwa Real Estate Chugoku, Ltd. rental housing Sekiwa Woods, Ltd. Supply of Sekiwa Real Estate Kyusyu, Ltd. and S housing Sekiwa Real Estate Tohoku, Ltd. condominiums materials SGM Operation, Ltd. Leasing real e estate k Designing, constructing,and contracting for Investment Management sale detached houses i Sekisui House SI Renovating housing Housing Asset Management, Ltd. Landscape and exteriorwork constrcution Housing construction, remodeling and exteriors Sekiwa Construction Higashi-Tokyo, Ltd. Nonlife insuarance agency Sekiwa Construction Kanagawa, Ltd. Foundation / H Sekisui House Financial erection & Services Co., Ltd. Renovating housing landscape / exterior work House Housing remodeling remodeling Sekisui House Remodeling, Ltd. Supply of materials Designing, constructing, and contracting for sale detached house Selling and developing real estate Overseas business Sekisui House Australia Holdings Pty Limited North America Sekisui House, LLC Sekisui House Changcheng(Suzhou) Real Estate Development Co., Ltd. Sekisui House Advanced Manufacturing (Shenyang) Co., Ltd. s u i o u s e, L t d. 12

13 7) Major Operations of Sekisui House Group 1. Location of Major Operations of the Company Head office: Tokyo office: Sales and project headquarters: Tohoku Sales Administration Headquarters Tokyo Sales Administration Headquarters Tokyo Sha Maison Sales Administration Headquarters Kanagawa Sales Administration Headquarters Saitama Sales Administration Headquarters Higashi Kanto Sales Administration Headquarters Kita Kanto Sales Administration Headquarters Chubu Daiichi Sales Administration Headquarters Chubu Daini Sales Administration Headquarters Chubu Sha Maison Sales Administration Headquarters Kansai Daiichi Sales Administration Headquarters Kansai Daini Administration Headquarters Kansai Sha Maison Sales Administration Headquarters Chugoku Sales Administration Headquarters Shikoku Sales Administration Headquarters Kyushu Sales Administration Headquarters International Department East Japan Development Department West Japan Development Department Condominium Headquarters House Purchase & Resale Department Branches: 119 branches Sales Offices: Customer Service Centers: Factories: Tohoku Factory Kanto Factory Shizuoka Factory Yamaguchi Factory Hyogo Factory Azai Factory R&D Institute Comprehensive Housing R&D Institute 1-88, Oyodonaka 1-chome, Kita-ku, Osaka 15-1, Akasaka 4-chome, Minato-ku, Tokyo 5 Sales Offices 30 Customer Service Centers Shikama-cho, Kami-gun, Miyagi Prefecture Koga-City, Ibaraki Prefecture Kakegawa-City, Shizuoka Prefecture Yamaguchi-City Kato-City, Hyogo Prefecture Nagahama-City, Shiga Prefecture City Sendai Shibuya-ku, Tokyo Shibuya-ku, Tokyo Yokohama Saitama Chiba Utsunomiya Nagoya Shizuoka Nagoya Osaka Osaka Osaka Hiroshima Takamatsu Fukuoka Osaka Shibuya-ku, Tokyo Osaka Shinjuku-ku, Tokyo Osaka Kizugawa- City, Kyoto Prefecture 13

14 2. Address of Major Operations of subsidiaries Sekiwa Real Estate, Ltd. Sekiwa Real Estate Kansai, Ltd. Sekiwa Real Estate Chubu, Ltd. Sekiwa Real Estate Chugoku, Ltd. Sekiwa Real Estate Kyushu, Ltd. Sekiwa Real Estate Tohoku, Ltd. Sekisui House Remodeling, Ltd. Sekisui House Financial Services Co., Ltd. SGM Operation Co., Ltd. Sekiwa Woods, Ltd. Sekisui House SI Asset Management, Ltd. Sekisui House Australia Holdings Pty Limited. North America Sekisui House, LLC Sekisui House Changcheng (Suzhou) Real Estate Development Co., Ltd. Sekisui House Advanced Manufacturing (Shenyang) Co., Ltd. Head office: 1-1, Yoyogi 2-chome, Shibuya-ku, Tokyo Head office: 1-30, Oyodonaka 1-chome, Kita-ku, Osaka Head office: 5-28, Meieki 4-chome, Nakamura-ku, Nagoya Head office: 1-25, Komachi, Naka-ku, Hiroshima Head office: 25-21, Hakataekimae 3-chome, Hakata-ku, Fukuoka Head office: 16-10, Honcho 2-chome, Aoba-ku, Sendai Head office: 1-90, Oyodonaka 1-chome, Kita-ku, Osaka Head office: 1-90, Oyodonaka 1-chome, Kita-ku, Osaka Head office: 13, Koyochonaka 5-chome, Higashinada-ku, Kobe Head office: 27-3, Ariso 2-chome, Imizu-City, Toyama Prefecture Head office: 12, Kojimachi 2-chome, Chiyoda-ku, Tokyo Head office: New South Wales, Australia Head office: Virginia, U.S.A. Head office: Jiangsu Suzhou City, China Head office: Liaoning Shenyang City, China 14

15 8) Outline of main subsidiaries Company Name Millions of yen Capital Percentage owned Sekiwa Real Estate, Ltd. 1, % Sekiwa Real Estate Kansai, Ltd. 5, % Sekiwa Real Estate Chubu, Ltd. 1, % Sekiwa Real Estate Chugoku, Ltd % Sekiwa Real Estate Kyushu, Ltd % Main business Houses for sale Business, Real Estate Management Fees Business Houses for sale Business, Real Estate Management Fees Business Houses for sale Business, Real Estate Management Fees Business Houses for sale Business, Real Estate Management Fees Business Houses for sale Business, Real Estate Management Fees Business Sekiwa Real Estate Tohoku, Ltd % Houses for sale Business, Real Estate Management Fees Business Sekisui House Remodeling, Ltd % Remodeling Business Sekisui House Financial Services Co., Ltd % Other Businesses SGM Operation Co., Ltd % Real Estate Management Fees Business Sekiwa Woods, Ltd % Custom Detached Houses Business Sekisui House SI Asset Management, Ltd Sekisui House Australia Holdings Pty Limited. North America Sekisui House, LLC Sekisui House Changcheng (Suzhou) Real Estate Development Co., Ltd. Sekisui House Advanced Manufacturing (Shenyang) Co., Ltd. Notes: % Real Estate Management Fees Business 610 (Millions of AUD) 256 (Millions of USD) 259 (Millions of USD) 105 (Millions of USD) 100.0% Other Businesses 100.0% Other Businesses 97.8% Other Businesses 100.0% Other Businesses 1. There are 123 consolidated subsidiaries, and 15 companies to which equity method of accounting is applied. 2. The Company transferred all the stocks of SGM Operation Co., Ltd. to Sekiwa Real Estate Kansai, Ltd, on February 1,

16 9) Employees 1. Outline of Sekisui House Group Number of employees Change compared to the previous year 21, (decreased) 2. Outline of Sekisui House, Ltd. Number of employees Change compared to the previous year Average age Average length of employment 14, (decreased) 40.0 years old 16.1 years Note: The number of employees stated above includes those dispatched to subsidiaries and the like. 10) Principal Lenders Millions of yen Name of lenders Amount of loan The Bank of Tokyo-Mitsubishi UFJ, Ltd. 36,074 Sumitomo Mitsui Banking Corporation 15,112 Mizuho Corporate Bank, Ltd. 4,700 Resona Bank, Ltd. 4,200 Note: The balance of borrowings in denominated by foreign currency is converted using a term-end rate of exchange. 16

17 2. Present Conditions of the Company as of January 31, ) Description of Common Shares of the Company 1 Total number of shares authorized to be issued 1,978,281,000 shares 2 Total number of shares issued 676,885,078 shares (Including treasury stock) (5,033,829 shares) 3 Total number of shareholders 39,298 4 Details of main shareholders are as follows: Name Number of shares held (thousands) Ratio of shareholding Sekisui Chemical Co., Ltd. 72, % Japan Trustee Services Bank, Ltd. (Trust account) 44, % The Master Trust Bank of Japan, Ltd. (Trust account) 41, % The Bank of New York Mellon as Depositary Bank for Depositary Receipt Holders 19, % Sekisui House Ikushikai 17, % The Bank of Tokyo-Mitsubishi UFJ, Ltd. 13, % Japan Trustee Services Bank, Ltd. (Trust account 9) 13, % SSBT OD05 OMNIBUS ACCOUNT TREATY CLIENTS 12, % The Dai-ichi Life Insurance Company, Limited 12, % State Street Bank and Trust Company , % Notes: 1. The Bank of New York Mellon as Depositary Bank for Depositary Receipt Holders is the nominee of shares deposited for issuance as American Depository Receipts (ADRs) of the Company. 2. Sekisui House Ikushikai is the Company s employee stock holding association. 3. The ratio of shareholding is calculated deducting shares of treasury stock from the total number of shares issued. 2) Outlines of Stock Acquisition Rights 1. Outlines of Stock Acquisition Rights granted in consideration of the performance of duties as of January 31, 2012 Number of stock acquisition rights 522 units Type and number of shares to be issued upon exercise of stock acquisition rights 522,000 common shares of the Company (1,000 shares per unit) 17

18 Current situation of stock acquisition rights held by posts Posts No.1 Stock Acquisition Rights (Stock compensation-type stock option) No.2 Stock Acquisition Rights (Stock compensation-type stock option) No.3 Stock Acquisition Rights (Stock compensation-type stock option) No.4 Stock Acquisition Rights (Stock compensation-type stock option) No.5 Stock Acquisition Rights (Stock compensation-type stock option) No.6 Stock Acquisition Rights (Stock compensation-type stock option) Notes: Directors (Outside Directors) Number of holders Number of stock acquisition rights Number of holders Executive Officers Number of stock acquisition rights Number of holders Corporate Auditors Number of stock acquisition rights Number of holders Others Number of stock acquisition rights (1) 11 (1) 11 (1) 11 (1) 53 (2) 61 (3) 66 (2) 84 (4) The number of Executive Officers stated in the above table does not include Executive Officers who concurrently hold the post of Directors. 2. The exercise price of stock acquisition rights above is 1 yen per share. 3. The exercise period of stock acquisition rights above is as stated below. No.1 Stock Acquisition Rights (Stock compensation-type stock option): From April 28, 2006 to April 27, 2026 No.2 Stock Acquisition Rights (Stock compensation-type stock option): From June 8, 2007 to June 7, 2027 No.3 Stock Acquisition Rights (Stock compensation-type stock option): From June 7, 2008 to June 6, 2028 No.4 Stock Acquisition Rights (Stock compensation-type stock option): From June 10, 2009 to June 9, 2029 No.5 Stock Acquisition Rights (Stock compensation-type stock option): From June 17, 2010 to June 16, 2030 No.6 Stock Acquisition Rights (Stock compensation-type stock option): From June 15, 2011 to June 14, Outlines of Stock Acquisition Rights granted in consideration of the performance of duties during the fiscal year under review Name of stock acquisition rights No.6 Stock Acquisition Rights (Stock compensation-type stock option) Number of stock acquisition rights 130 units Type and number of shares to be issued upon exercise of stock acquisition rights 130,000 common shares of the Company (1,000 shares per unit) Issuance price 592 yen per share 18

19 Amount to be paid in upon exercise of each stock acquisition right 1 yen per share Exercise period of stock acquisition rights The period in which stock acquisition rights are exercisable will be determined by the Board of Directors of the Company within the period between June 15, 2011 and June 14, Conditions for exercise of stock acquisition rights (i) Holders of stock acquisition rights can exercise stock acquisition rights from the day following the day on which they lose their positions as directors of the Company or its consolidated subsidiaries (including corporate officers in a case where the Company turns into company with committees" in the future); corporate auditor, or executive officers (the start date of exercise of stock acquisition rights ). (ii) Notwithstanding the description in the above item (i), if either of the following two cases (a) or (b) occurs, holders of stock acquisition rights can exercise their stock acquisition rights within the periods specified (provided, however, that with respect to (b), the foregoing shall not be applied to a case in which stock acquisition rights of the reorganized company are assigned newly to the holders of stock acquisition rights). (a) Holders of stock acquisition rights are unable to have the start date of exercise of stock acquisition rights commencing before June 14, 2030: Between June 15, 2030 and June 14, 2031 (b) The general meeting of shareholders of the Company approves a resolution for a merger contract in which the Company becomes a dissolving company or a resolution for a share exchange or transfer contract or plan in which the Company becomes a wholly-owned subsidiary (in case of resolution of the general meeting of shareholders of the Company being not required, a resolution of the Board of Directors will substitute therefor): For 15 days from the date following the date on which the approval is granted (iii) If holders of stock acquisition rights waive their rights, they cannot exercise the rights. (iv) No partial exercise of a single stock acquisition right is allowed. (v) The terms and conditions of the stock acquisition rights other than the above shall be provided for in the Stock Acquisition Rights Allotment Agreement entered into between the Company and each of the officers to whom stock acquisition rights were allotted. Terms and conditions for acquisition of stock acquisition rights: If the general meeting of shareholders of the Company approves proposals (1), (2), (3), (4) and (5) below, the Company may acquire the stock acquisition rights without compensation on a date separately determined by the Board of Directors (if an approval of the general meeting of shareholders is not required, then, the day on which the Board of Directors of the Company adopts a resolution). (1) a proposal for approval of a merger contract in which the Company is to be dissolved; (2) a proposal for approval of a corporate division agreement or plan under which the Company becomes a split company; (3) a proposal for approval of a share exchange or transfer contract or plan in which the Company becomes a wholly-owned subsidiary; 19

20 (4) a proposal for approval of changes in the Articles of Incorporation to establish the provisions that the Company s approval is required for acquisition by transfer of any shares issued by the Company; (5) a proposal for approval of changes in the Articles of Incorporation to establish the provisions that the Company s approval is required for acquisition by transfer of shares to be issued upon exercise of stock acquisition rights, or that the Company shall acquire all shares of a specified type by resolution of its general meeting of shareholders. Current situation of stock acquisition rights held by posts Posts Directors (Outside Directors) Number of holders 11 (1) Number of stock acquisition rights 84 (4) Number of holders Executive Officers Number of stock acquisition rights Note: The number of Executive Officers stated in the above table does not include Executive Officers who concurrently hold the post of Directors. 3. Other important matters concerning Stock Acquisition Rights Outlines of the Stock Acquisition Rights referred to Zero Coupon Convertible Bonds due 2016 (bonds with stock acquisition rights), that were issued based on the resolution of the Board of the Directors of the Company held on June 16, 2011 are stated below. Issue date July 5,2011 Number of stock acquisition rights 5,000 units Type of shares to be issued upon Common shares of the Company exercise of stock acquisition rights Number of shares to be issued upon exercise of stock acquisition rights Conversion Price Exercise period of stock acquisition rights The number is determined by dividing the aggregate principal amount of the bonds upon exercise of the stock acquisition rights by the Conversion Price. 1,000 per share (subject to adjustment in certain circumstances) Between July 19, 2011 and June 21, 2016 No partial exercise of a single stock acquisition right is allowed Conditions for exercise of stock acquisition rights Balance of the Convertible Bonds Prior to (but not including) 6 July 2015, only if the closing price of the common shares of the Company for any 20 trading days in a period of 30 consecutive trading days ending on the last trading day of any particular fiscal quarter of the Company is more than 120 per cent. of the Conversion Price in effect on the last trading day of such fiscal quarter of the Company, a Bondholders exercise the Stock Acquisition Rights on and after the first day of the immediately following fiscal quarter of the Company until the end of such fiscal quarter of the Company (or, in the case of the fiscal quarter of the Company commencing on 1 May 2015, until 3 July 2015) 50,000 million 20

21 3) Directors and Corporate Auditors 1. Names and posts of Directors and Corporate Auditors Chairman, Representative Director & CEO(Chief Executive Officer). President, Representative Director & COO(Chief Operating Officer). Directors: Sumio Wada Shiro Inagaki Katsuhiko Machida Fumiaki Hirabayashi Junichi Terada Takashi Uchida Tetsuo Iku Daiji Kuroki Kengo Yoshida Full-Time Standing Corporate Auditors: Tadashi Iwasaki Yoshiro Kubota Corporate Auditors: Takaharu Dohi Teruyuki Saegusa Eiji Mansho Isami Wada Toshinori Abe Executive Vice President & Executive Officer, management of technology, in charge of purchasing, Chief Manager of International Business Department Executive Vice President & Executive Officer, in charge of accounting & finance, IT operation and auditing Senior Managing Officer, in charge of TKC project, General Manager of Tokyo Administration Office and Chief Manager of Corporate Communications Department Senior Managing Officer, in charge of detached house projects, real estate, corporate marketing, personnel and administrative control of subsidiary & affiliated companies Managing Officer, General Manager of Saitama Sales Administration Headquarters Managing Officer, in charge of design, technology development, construction and environment, General Manager of Technology Headquarters Managing Officer, in charge of Sha-Maison project, General Manager of Chubu Daiichi Sales Administration Headquarters Managing Officer, General Manager of Manufacturing Headquarters Notes: 1. Director Mr. Katsuhiko Machida is Outside Director as prescribed in Section 15 of Article 2 of the Companies Act. 2. Corporate Auditors Messrs. Takaharu Dohi, Teruyuki Saegusa and Eiji Mansho are Outside Corporate Auditors as prescribed in Section 16 of Article 2 of the Companies Act. 3. In order to promote prompt management through a clear distinction between the decision-making and the business operations of the management system and to create a management structure that can accurately meet the needs of a volatile economic and market environment, the Company has adopted an Executive Officer System. In addition to the executive officers mentioned above, who simultaneously serve as Directors, the Company has 16 full-time executive officers as of January 31, The duties of the Directors changed on February 1, 2012 as set forth below: Junichi Terada Senior Managing Officer, in charge of detached house projects, real estate, corporate marketing and administrative control of subsidiary & affiliated companies Takashi Uchida Managing Officer, Chief Manager of Personnel Department 21

22 5. Directors and Corporate Auditors who concurrently hold the important post of other companies are stated below. Directors: Name Company in which Directors and Corporate Auditors of the Company hold an concurrent post Post Isami Wada Almetax Manufacturing Co., Ltd. Executive Advisor & Director Sumio Wada Sekisui House Australia Holdings Pty Limited North America Sekisui house, LLC Sekisui House Changcheng (Suzhou) Real Estate Development Co., Ltd. (Josei) Sekisui House Changcheng (Suzhou) Real Estate Development Co., Ltd. (Josyo) Sekisui House Advanced Manufacturing (Shenyang) Co., Ltd. Sekisui House (Shenyang) Co., Ltd. President & Director Chairman & CEO Chairman & Representative Director Chairman & Representative Director Chairman & Representative Director Chairman & Representative Director Sekisui House (Taicang) Co., Ltd. Chairman & Representative Director Director Shiro Inagaki Katsuhiko Machida Fumiaki Hirabayashi Sekiwa Woods, Ltd. Sekisui House Financial Services Co., Ltd. The Mortgage Corporation of Japan, Limited Sharp Corporation Sumai no Toshokan Co., Ltd. President & Representative Director Director Chairman & Representative Director President & Representative Director Junichi Terada Sekiwa Real Estate, Ltd. Corporate Auditor Daiji Kuroki Sekiwa Real Estate Chubu, Ltd. Corporate Auditor Kengo Yoshida Sekiwa Woods, Ltd. Sekisui House Advanced Manufacturing (Shenyang) Co,.Ltd. Director Director Corporate Auditors: Name Tadashi Iwasaki Yoshiro Kubota Takaharu Dohi Teruyuki Saegusa Eiji Mansho Company in which Directors and Corporate Auditors of the Company hold an concurrent post Sekiwa Real Estate Kansai, Ltd. Sekiwa Real Estate Chugoku, Ltd. Sekiwa Real Estate Kyushu, Ltd. Sekiwa Real Estate Tohoku, Ltd. Sekisui House Remodeling, Ltd. Almetax Manufacturing Co., Ltd. SGM Operation Co., Ltd. Dohi Law Office Kansai Telecasting Corporation The Kansai Electric Power Co., Inc. Hankyu Hanshin Holdings, Inc. Kawase Computer Supplies Co., Ltd. Saegusa Circulation Research Co., Ltd Shinki Bus Co., Ltd Sekisui Chemical Co., Ltd Sekisui Plastics Co., Ltd. Post Corporate Auditor Corporate Auditor Corporate Auditor Corporate Auditor Corporate Auditor Corporate Auditor Corporate Auditor Lawyer Director Corporate Auditor Corporate Auditor Corporate Auditor Representative Director Corporate Auditor Full-time Corporate Auditor Corporate Auditor 22

23 2. Remunerations paid for Directors and Corporate Auditors Directors (Outside Director) Corporate Auditors (Outside Corporate Auditors) Total (Outside Officers Number of Remunerations Number of Remunerations Number of Remunerations people (Millions of yen) people (Millions of yen) people (Millions of yen) Remunerations based on a general meeting of shareholders resolution 11 (1) 384 (18) 5 (3) 93 (43) 16 (4) 477 (62) Stock compensation-type stock options (stock acquisition rights) 11 (1) 49 (2) 11 (1) 49 (2) Directors bonuses accounted for as costs 11 (1) 160 (3) 11 (1) 160 (3) Notes: 1. Remunerations based on the general meeting of shareholders resolution to the Directors (43 million yen or less per month for all Directors as a group) were within the limit fixed pursuant to resolution of the 43rd Ordinary General Meeting of Shareholders held on April 27, 1994, and also to Corporate Auditors (nine million yen or less per month for all Corporate Auditors as a group) were within the limit fixed pursuant to resolution of the 55th Ordinary General Meeting of Shareholders held on April 27, Stock compensation-type stock options (stock acquisition rights) were within the limit fixed pursuant to resolution of the 56th Ordinary General Meeting of Shareholders held on April 26, 2007 (the maximum amount and number are 90 million yen and 90 stock acquisition rights per year). 3. Directors bonuses accounted for as costs in the above table are made in consideration for the services rendered during the fiscal year under review and are scheduled to be paid based on a resolution to be adopted at the 61st Ordinary General Meeting of Shareholders that will be held on April 26,